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EXPORTS AND IMPORTS OF GOODS AND SERVICES

EXPORTS AND IMPORTS OF GOODS AND SERVICES . Buyung Airlangga. Transaction with Abroad. Goods and Services (included in the estimation of GDP expenditure)

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EXPORTS AND IMPORTS OF GOODS AND SERVICES

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  1. EXPORTS AND IMPORTS OF GOODS AND SERVICES BuyungAirlangga

  2. Transaction with Abroad • Goods and Services (included in the estimation of GDP expenditure) • Income (Flow of factor services; Payment of production factors ownership which is used by foreign parties among others, as labor income, investment income and the rent of natural resources) • Capital • Financial Instrument

  3. Transaction with Abroad (contd.) • Export – flow of goods and services from resident unit to non-resident unit • Import – flow of goods and services from non-resident unit to resident unit

  4. Transaction with Abroad (contd.) • Classification used in goods transaction: • Harmonized System (Developed by World Custom Organization) • Standard International Trade Classification (SITC) • Recorded when there is a change of ownership, in practice when recorded in: • Customs (across geographical boundaries) • Purchasing by non-resident unit in an economic territory

  5. Transaction with Abroad (contd.) • Export • Goods are recorded f.o.b. (free on board, except value of insurance and transportation) during change of ownership or when the goods cross national boundaries • Trade of non-factor services includes supply of services for non resident unit • Transportation, insurance, hotel and restaurant, etc. • Data from goods transaction which is recorded from customs manifest and institutions that buy from domestic (embassies and non-resident institutions)

  6. Transaction with Abroad (contd.) • Export (Contd.) • Export of services includes non-factor services export and purchases by non-resident of resident institutional • Data on Exports of services collected from survey or bank transaction records. Purchases by foreign purchaser in domestic region recorded as traveling in BOP • Export might be recorded underestimate because of undervaluation problem, smuggling, miss declaration of goods, miss coverage, and unrecorded other transaction (i.e., e-commerce)

  7. Transaction with Abroad (contd.) • Import • Includes non-factor services and imports of goods • Goods are recorded c.i.f. (cost, insurance and freight) at national boundaries; but national account adjusted insurance and freight item and move them into the services so that assessment becomes f.o.b. • Import of goods which is purchased by residents during trips abroad are recorded as services related to travel

  8. Transaction with Abroad (contd.) • Import(Contd.) • Imports of goods and services are exclude contraband/illegal goods, undervaluation, online transaction, unrecorded transaction, and payment outside the banking system. • Other service transactions are difficult to quantify, such as communication, computer services (i.e. software development ) and online transaction.

  9. Transaction with Abroad (contd.) • Some exceptions in the transaction of goods and services with Abroad: • Transaction by non-resident unit with abroad • Mutations product samples, goods for exhibition, goods for repair and for lease • Movement of goods owned by residents who return from abroad

  10. Transaction with Abroad (contd.) • Some exceptions in the transaction of goods and services with Abroad: • Factor services (Labor, source of capital, etc.) • Goods leased or rented

  11. Standard International Trade Classification (SITC) 0 – Foods and Live Animals 1 – Beverages and tobacco 2 – Raw materials, inedible except fuels 3 – Mineral fuels, lubricants and related materials 4 – Oils, fats and waxes of animal and plant 5 – Chemicals and related products

  12. Standard International Trade Classification (SITC) (Contd.) 6 – Manufactured goods classified mainly by material type 7 – Machinery and transport equipment 8 – Component manufacturing yields 9 – Commodities and transactions not included in any group of SITC I – Monetary Currency II – Gold coins and coin currency

  13. Valuation and Time of Recording of exports and imports of goods • Time of recording • Principally – recorded when there is a change of ownership • Practically – change of ownership considered occurred while carrying the transaction in the books • Might not in line with the stage of the transaction process • Valuation • Export and Import of goods valued f.o.b. at borders of the exporting country : • Basic price • Added with transportation and distribution cost to the state boundary including loading cost to the ship • Added with any taxes less subsidies goods of export

  14. Exports and Imports of Services • Export of services – all of services supplied by resident for non-resident • Import of services – all of services supplied by non-resident for resident • Types of Services : • Transportation • Tourism • Other services – Construction, Business Services, Finance Services, Insurance, etc.

  15. EXPORT-IMPORT OF GOODS AND SERVICES For a while, the value of exports and imports do not count each one, but still incorporated into net exports; Before the available representative data on import-export, import-export value is calculated from the total value of GDP and total use of other components (balancing).

  16. Thank you

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